Another dramatic tussle at FGV

By P Prem Kumar

The leadership turmoil at Felda Global Ventures Holdings Bhd (FGVH) reached a boiling point yesterday with chairman Tan Sri Mohd Isa Abdul Samad (right) and suspended CEO Datuk Zakaria Arshad (left) trading allegations to defend their actions.

In a hastily called press conference at Menara Felda, Kuala Lumpur, Mohd Isa claimed that Zakaria’s immediate suspension — together with three other executives — was based on the “improprieties” identified by external auditor PricewaterhouseCoopers Malaysia (PwC Malaysia).

The findings by the audit firm were related to payment and delivery delays between Delima Oil Products Sdn Bhd and Afghan-based customer, Safitex. Mohd Isa said an internal probe has been launched to investigate PwC Malaysia’s findings after Zakaria declined the board’s offer to resign voluntarily.

“It is the board’s view that he resign so that the finding does not escalate into a bigger issue that would taint FGVH’s image,” said Mohd Isa.

Also suspended are FGVH CFO Ahmad Tifli Mohd Talha, Delima Oil GM Ahmad Salman Omar and FGV Trading Sdn Bhd CEO Kamarzaman Abd Karim.

Meanwhile, Zakaria in a Twitter posting last night claimed his suspension was “unprecedented” in the history of FGVH and Federal Land Development Authority (Felda).

“Today’s news was unprecedented in the history of Felda and FGVH. The truth will prevail.

“To my FGVH colleagues and warga Felda, I am sorry I had to leave the office abruptly, didn’t get a chance to address all of you,” he said.

But Zakaria claimed that the board had made “ridiculous” investment requests, including £100 million (RM551 million) for a nano-carbon company and RM300 million for a creamer company.

“Now they (the FGVH board) want to expand, they need another £100 million. To me this is ridiculous, we’re a plantation company,” he said, as reported by a local daily.

The leadership conflict between Mohd Isa and Zakaria came only 14 months after the latter was picked by the former Negri Sembilan Mentri Besar to replace Datuk Mohd Emir Mavani Abdullah to lead FGVH.

FGVH had been in the spotlight in the last 12 months over massive losses and the slump in its share prices.

The firm — which saw its share prices drop from its high of over RM5 after what was then the world’s second-largest initial public offering in 2012 — had lost billions in market capitalisation.

Investors who were less than impressed with the debacle at the firm dumped its share yesterday, pushing it 6.63% lower to close at RM1.62. It was the most active counter at the bourse.

Mohd Isa, who sits on the boards for both FGVH and Delima Oil, also accused Zakaria of “jumping the gun” in making statements over the suspension.

“FGVH still has not made a formal accusation because we are investigating. But since then, he has jumped the gun with his statements to the media,” he told a packed press conference.

Mohd Isa also claimed he met Zakaria personally on May 31 on the request of the board.

“I asked him to resign but he declined to do so, so we are now not forcing him to quit,” he said.

It is believed that Mohd Isa and Zakaria had a fallout over how to run FGVH. Zakaria had invited the Malaysian Anti-Corruption Commission (MACC) to investigate FGVH for any possible management wrongdoings.

Meanwhile, Bernama reported that MACC was prepared to investigate some current issues involving FGVH.

“Yes, MACC will study the report first if it was under the purview of MACC or otherwise,” said its chief commissioner (operations) Datuk Azam Baki.

FGVH posted a profit of RM2 million for the January-March 2017 period, after recording a RM81 million loss for the same quarter a year ago.

On allegations of possible coverups over the request for Zakaria’s resignation, Mohd Isa said: “This does not mean we are covering it up.”

The internal probe is presently being conducted by FGVH’s internal audit committee. Mohd Isa — who is also a member of the committee — did not provide any deadline on when the probe will be completed.

“They can challenge the accusation after the investigation is complete, and a show cause letter will be issued for them to respond,” he said.

He declined to reveal the details of the improprieties, but mentioned it “involves many millions of ringgit”.

“I cannot share the initial finding by PwC Malaysia, as I was not given the mandate to do so; my lawyer said I am not to disclose [the details now], but it involves topics like credit limit as an example,” Mohd Isa said, adding that FGVH and himself would cooperate with MACC if there is such an investigation.

“Zakaria himself can request MACC to investigate, if he wants.”

In the absence of the four officers, FGVH has formed a board executive committee comprising two FGVH directors, Datuk Dr Omar Salim and Datuk Mohd Zafer Mohd Hashim, as well as head of logistics cluster Azman Ahmad to take over the responsibility to perform the functions of the group president and CEO.

At the same time, FGVH’s plantation sector group financial controller Aznur Kama Azmir will serve as interim CFO.